IMAGE: Artist rendering of the proposed 232 Pagosa Street development, flanked on the right by the Alley House restaurant.
The Town of Pagosa Springs — in an effort to encourage more ‘low-‘ and ‘moderate-income’ housing within the town limits — adopted a Density Bonus Policy in April 2021, specifying that developers could, under certain circumstances, build more housing units on their property than is normally allowed under the Town’s Land Use and Development Code (LUDC)…
…if some of the units are deed-restricted at 120% Area Median Income or less.
Unfortunately, that restriction — 120% AMI — will not produce housing that a typical Pagosa Springs family can afford. According to the Colorado Housing and Finance Administration (CHFA), a family of four would need to be bringing in nearly $95,000 a year to afford a three-bedroom rental priced at the 120% AMI price ($2,565 per month).
Not many working families in Pagosa bring in $95,000 a year; certainly, no “typical” working family does. But we can’t blame the Town of Pagosa Springs for trying, even if some of their attempts cause us to scratch our heads.
Since April 2021, four developers have applied for density bonuses, and three of those applications have been approved.
The application for a density bonus from the developers of a potential mixed-use building at 232 Pagosa Springs, however, was turned down by the Town Council on February 7.
The developers — Dirty Rose LLC, and Reynolds Ash & Associates, who might be calling themselves Eagle Mountain Development, or perhaps FOUA LLC — had proposed a rather creative interpretation of the policy. They wanted to include eight luxury condo units in their three-story building, but the LUDC allowed for only seven units.
So the developers came up with a ‘work-around’. Instead of deed-restricting one of the eight 1,850-square-foot condo units at 232 Pagosa Street (as a normal person might propose?) the developers suggested that they would convert an 800-square-foot upstairs office in a mixed-use building down the street — at 262 Pagosa Street — into a deed-restricted studio apartment.
In order for this scheme to make sense, the Town would need to grant a density bonus for both 232 Pagosa Street (where no ‘workforce’ housing would be located) and also a density bonus for 262 Pagosa Street.
The Town Council placed this requested ‘bonus’ on their February 7 agenda.
From the Density Bonus Policy:
The application shall be considered first by the Planning Commission, typically in congruence with sketch major design application. After a recommendation is made by the Planning Commission, the Town Council shall consider the request following a public hearing.
But the consideration of the density bonus on February 7 was not noticed, or conducted, as a public hearing. I’m not sure who was responsible for that oversight.
Nevertheless, the Town Council had allowed public comment at the start of the February 7 meeting — three minutes, per speaker — and several citizens had stepped up to pose questions.
1. How can the Town Council allow the developer, in a density bonus agreement, to ‘exchange’ an 800-square-foot converted office for an allowance to build an additional 1,800-square-foot luxury unit in a completely different building, when the Density Bonus Policy (which you can download here) states:
Density bonus additional units shall be of similar quality to allowable units.
2. How can the Town Council grant a density bonus based on only one deed-restricted ‘workforce unit’… when the Density Bonus Policy states:
At least 25% of the total units in the project (including the density bonus units) must be rented or sold at 120% of AMI or below during the property restriction period.
3. Does the fact that the developer is asking to build eight large luxury condo units atop a mixed-use commercial development seem to be contributing to the massive size of the project, and its lack of conformance to the general character of the surrounding neighborhood? The Town Planning Department staff seemed to have similar concerns, as stated in the meeting packet:
Staff identified there were elements of the project that were not in compliance with the Land Use Development Code at the time of Sketch MDR consideration, including but not limited to: density, front setbacks, massing, and landscaping. A concern might be that the inclusion of the eighth 1,850-square-foot condo unit is contributing to the non-complying project elements.
Let’s listen to some of the comments from the Council itself.
Council member Brooks Lindner:
“I’d like to be the first to comment, because I think we overlooked something here that may render this whole discussion here, tonight, moot. Which that a density bonus is being requested for 262 Pagosa Street, but the HOA in that building has not requested a density bonus. In other words, if we grant a density bonus, we would essentially be imposing a density bonus on the building, that the HOA did not ask for.”
Mayor Shari Pierce:
“So you’re saying that the building that’s condominiumized, down there at 262. So it would need to be, those owners getting together and asking for a density bonus?”
Mr. Lindner:
“Yeah… suppose that we passed the density bonus, and then we go to the owners of 262, and tell them… and they say, ‘What? We didn’t have any say in this?'”
Council member Mat deGraaf:
“I am personally not in favor of ‘trading’ units… or trading density bonuses for off-site units. I think that’s problematic, and as a matter of principle, I think that’s a bad practice.”
Mayor Pierce:
“I’m going to agree with Mat. I don’t think this request is meeting the spirit of the policy, and I don’t feel comfortable with allowing a density bonus in a different building. And I am already concerned about the size of this building, and our staff says that their concern is that the inclusion of this would be contributing to non-compliant project elements. I’m concerned about the front setback. So I don’t want to approve anything that would make those things harder to deal with…”
Council member Gary Williams referred to the fact that the developer is not dedicating 25% of the units to workforce housing, as required by the April 2021 policy:
“I was approaching this slightly differently. If you came to us and said that 25% of the units were going to be workforce housing and we will have this increased density, I think I would still say, ‘No.’
“Because of the location, and the neighborhood concerns about the mass of the building. And then we add these complications — the workforce unit is smaller and located somewhere else, and we have to take a lot of things into consideration — and I guess I’m not in favor of this increased density…
“We’ve got to create an aesthetic in the downtown that’s reasonable and attractive… and I’m sure yours will be. If it weren’t so bulky, and if it didn’t infringe on the sunlight of your next door neighbors…”